16-004655MTR Shamarion Manley, A Minor, By And Through His Parents And Natural Guardians, Victoria Manley And Sharmane Manley vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Monday, November 26, 2018.

Summary: Petitioner did not prove that AHCA should recover less than the amount of its Medicaid lien claim.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SHAMARION MANLEY, A MINOR, BY

AND THROUGH HIS PARENTS AND

NATURAL GUARDIANS, VICTORIA

MANLEY AND SHARMANE MANLEY,

Petitioner,

vs. Case No. 16 - 4655MTR

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Respondent.

_____ __________________________/

FINAL ORDER

A duly - noticed final hearing was held in this case on

October 20, 2016, via video teleconference in Tallahassee and

Lauderdale Lakes, Florida, before W. David Watkins, a designated

Adm inistrative Law Judge of the Division of Administrative

Hearings (ÐDOAHÑ) .

APPEARANCES

For Petitioner: Floyd B. Faglie, Esquire

Staunton and Faglie, P.L.

189 East Walnut Street

Monticello, Florida 32344

For Respondent: Alexander R. Boler, Esquire

Xerox Recovery Services

Suite 300

2073 Summit Lake Drive

Tallahassee, Florida 32317

STATEMENT OF THE ISSUE

The is sue to be determined is the amount to be reimbursed

to Respondent, Agency for Health Care Administration (AHCA), for

medical expenses paid on behalf of Petitioner, Shamarion Manley,

from a personal injury settlement received by Petitioner from a

third part y.

PRELIMINARY STATEMENT

On August 16, 2016, Petitioner filed a Petition to Determine

Amount Payable to Agency for Health Care Administration in

Satisfaction of Medicaid Lien, pursuant to section

409.910(17)(b), Florida Statutes. Thereafter, the matter wa s

assigned to the undersigned administrative law judge to conduct a

formal administrative hearing and enter a final order.

The matter was set for hearing to commence on October 20,

2016. On October 7, 2016, the undersigned granted PetitionerÓs

Motion for Leave to Amend the Petition , and the First Amended

Petition to Determine Amount Payable to Agency for Health Care

Administration in Satisfaction of Medicaid Lien was substituted

for the original Petition.

Prior to hearing , the parties filed a Joint Prehe aring

Stipulation (JPHS) which included numerous stipulated and

admitted facts. To the extent relevant, those facts have been

incorporated herein.

The hearing proceeded as scheduled, with Petitioner calling

two witnesses, Scott M. Newmark, Esquire; and R . Vinson Barrett,

Esquire. PetitionerÓs Exhibits 1 through 12 were admitted in

evidence. Respondent did not enter in evidence any document or

call any witnesses. PetitionerÓs evidence and testimony was

unrebutted.

The one - volume Transcript of the heari ng was filed on

November 9, 2016. Petitioner and Respondent timely filed

Proposed Final Orders on November 16, 2016. Both partiesÓ

Proposed Final Orders were considered by the undersigned in the

preparation of this Final Order.

All references to the Flo rida Statutes are to the 2016

version, unless otherwise noted.

FINDING S OF FACT

Based on the stipulations of the parties, evidence adduced

at hearing, and the record as a whole, the following Findings of

Fact are made:

1 . On June 12, 2010, Shamarion Manle y (ÐShamarionÑ)

suffered a severe left brachial plexus injury, right humerus

fracture, neurological injury , and cardiac arrest during his

birth. He was hospitalized until July 7, 2010, when he was

discharged home to the care of his parents. Due to his se vere

left brachial plexus injury and other injuries suffered during

birth, Shamarion is unable to use his left arm and hand and

suffers from a speech impairment. (JPHS p. 8)

2 . ShamarionÓs past medical expenses related to his

injuries were paid in part by Medicaid and Sunshine State

Health. Medicaid paid $74,061.27 in benefits and Sunshine State

Health paid $106,656.23 in benefits. The amounts paid by

Medicaid and Sunshine State Health , together with $22,118 in

unpaid medical bills, constituted Shamari onÓs entire claim for

past medical expenses. Accordingly, ShamarionÓs entire claim

for past medical expenses was $202,835.50. (JPHS p. 8 - 9)

3 . Shamarion, or others on his behalf , did not make

payments in the past or in advance for ShamarionÓs future

me dical care, and no claim for damages was made for

reimbursement, repayment, restitution, indemnification, or to be

made whole for payments made in the past or in advance for

future medical care.

4 . ShamarionÓs parents and natural guardians, Victoria and

Sharmane Manley, brought a medical malpractice action to recover

all of ShamarionÓs damages, as well as their individual damages

associated with their sonÓs injury, against the medical

providers allegedly responsible for ShamarionÓs injuries

(ÐDefendantsÑ) . (JPHS p. 9)

5. ShamarionÓs parents compromised and settled the medical

malpractice lawsuit with the Defendants for t he amount of

$410,000. (JPHS p. 9)

6 . In making this settlement, the settling parties agreed

that: 1) the settlement did not fully c ompensate Shamarion for

all his damages; 2) ShamarionÓs damages had a value in excess of

$2,250,000, of which $202,835.50 represented his claim for past

medical expenses; and 3) allocation of $36,916.06 of the

settlement to ShamarionÓs claim for past medic al expenses was

reasonable and proportionate. In this regard the two (2)

Releases (ÐReleasesÑ) memorializing the settlement stated:

Although it is acknowledged that this

settlement does not fully compensate

Shamarion Manley for all of the damages he

has allegedly suffered, this settlement

shall operate as a full and complete Release

as to RELEASEES without regard to this

settlement only compensating Shamarion

Manley for a fraction of the total monetary

value of his alleged damages. The parties

agree that Shamarion ManleyÓs alleged

damages have a value in excess of

$2,250,000, of which $202,835.50 represents

Shamarion ManleyÓs claim for past medical

expenses. Given the facts, circumstances,

and nature of Shamarion ManleyÓs injuries

and this settlement, th e parties have agreed

to allocate {$36,916.06} [1/] of this

settlement to Shamarion ManleyÓs claim for

past medical expenses and allocate the

remainder of the settlement towards the

satisfaction of claims other than past

medical expenses. This allocation i s a

reasonable and proportionate allocation

based on the same ratio this settlement

bears to the total monetary value of all

Shamarion ManleyÓs damages.

Further, the parties acknowledge that

Shamarion Manley may need future medical

care related to his inj uries, and some

portion of this settlement may represent

compensation for future medical expenses

Shamarion Manley will incur in the future.

However, the parties acknowledge that

Shamarion Manley, or others on his behalf,

have not made payments in the past or in

advance for Shamarion ManleyÓs future

medical care and Shamarion Manley has not

made a claim for reimbursement, repayment,

restitution, indemnification, or to be made

whole for payments made in the past or in

advance for future medical care.

Accord ingly, no portion of this settlement

represents reimbursement for future medical

expenses.

(JPHS p. 9 )

7 . Because Shamarion was a minor, court approval of the

settlement was required. Accordingly, on December 14, 2015, the

Palm Beach County Circuit C ourt Judge handling the litigation of

the medical malpractice action, the Honorable Edward Artau,

approved the settlement by entering an Order on PlaintiffsÓ

Petition for Approval of Settlement (Order Approving

Settlement). (JPHS p. 10)

8 . As a conditio n of ShamarionÓs eligibility for Medicaid,

Shamarion assigned to AHCA his right to recover from liable

third - parties medical expenses paid by Medicaid. See 42 U.S.C.

§ 1396a(a)(25)(H) and § 409.910(6)(b), Fla. Stat.

9 . During the pendency of ShamarionÓs medical malpractice

action, AHCA was notified of the action , and AHCA, through its

collections contractor , Xerox Recovery Services, asserted a

$74,061.27 Medicaid lien against ShamarionÓs cause of action and

settlement of that action. (JPHS p. 9)

10 . B y letter of January 5, 2016, AHCA was notified by

ShamarionÓs medical malpractice attorney of the settlement and

provided a copy of the executed Releases, Order Approving

Settlement , and itemization of $146,540.70 in litigation costs.

This letter explaine d that ShamarionÓs damages had a value in

excess of $2,250,000, and the $410,000 settlement represented

only a n 18.2 percent recovery of ShamarionÓs damages.

Accordingly, he had recovered only 18.2 percent of his

$202,835.50 claim for past medical expense s. This letter

requested AHCA to advise as to the amount AHCA would accept in

satisfaction of its Medicaid lien. (JPHS p. 10)

11 . AHCA did not respond to ShamarionÓs attorneyÓs letter

of January 5, 2016. (JPHS p. 10)

12 . AHC A did not file an action to set aside, void, or

otherwise dispute ShamarionÓs settlement with the Defendants.

(JPHS p. 10)

13 . AHCA has not commenced a civil action to enforce its

rights under section 409.910. (JPHS p. 10)

14 . The Medicaid program spent $74,061.27 on behalf of

Shamarion, all of which represents expenditures paid for

ShamarionÓs past medical expenses. (JPHS p. 10)

15 . No portion of the $74,061.27 , paid by the Medicaid

program on behalf of Shamarion , represents expenditures for

future medical expenses, and AHCA did not make payments in

advance for medical care. (JPHS p. 10)

16 . AHCA has determined that $146,540.70 of ShamarionÓs

litigation costs are taxable costs for purposes of the section

409.910(11)(f) formula calculation. (JPHS p. 11)

17 . Subtracti ng the $146,540.70 in taxable costs and

25 percent in allowable attorneyÓs fees, the section

409.910(11)(f) formula , applied to ShamarionÓs $410,000

settlement , requires payment of $80,479.65 to AHCA in

satisfaction of its $74,061.27 Medicaid lien. Since the

$80,479.65 formula amount is more than the $74,061.27 Medicaid

lien, AHCA is seeking payment of the full $74,061.27 Medicaid

lien from ShamarionÓs $410,000 settlement. (JPHS p. 11)

18 . Petitioner has deposited the full Medicaid lien amount

in an inte rest bearing account for the benefit of AHCA pending

an administrative determination of AHCAÓs rights, and this

constitutes Ðfinal agency actionÑ for purposes of chapter 120,

Florida Statutes, pursuant to section 409.910(17). (JPHS p. 11)

Testimony of Sc ott M. Newmark

19 . Mr. Newmark has been an attorney for 30 years, and

during that entire time he has practiced plaintiff personal

injury and medical malpractice law. Mr. Newmark testified that

he handles jury trials and routinely represents children who

have suffered catastrophic injury, particularly at birth. He is

a member of the Florida Justice Association, the Palm Beach

Justice Association , and the Trial Lawyer Section of the Florida

Bar. Mr. Newmark testified that he stays abreast of jury

verdicts in his area and that he routinely makes assessments

concerning the value of damages suffered by injured parties,

explaining his process for these determinations. He testified

that he has been accepted as an expert in the valuation of

damages suffered by injured parties by DOAH in the past.

20 . Mr. Newmark was accepted as an expert in the valuation

of damages suffered by injured parties. He represented

Shamarion and his parents relative to ShamarionÓs medical

malpractice action. He explained that as par t of his

representation, he reviewed ShamarionÓs medical records, met

with his doctors, met with experts, reviewed expert reports, and

met with Shamarion and his parents many times. Mr. Newmark gave

a detailed explanation of the injuries suffered by Shama rion

during his birth. He explained that during the birth process ,

improper force was used and Shamarion suffered a brachial plexus

injury when the nerves in his left shoulder were ripped off the

spinal column. As a result of this injury , he is unable to use

his left arm and has no grip strength in his left hand.

Mr. Newmark testified that this injury is a permanent

neurological injury and for the remainder of his life will

continue to have a Ðtremendously dramatic impact on Shamarion.Ñ

21 . Mr. Newmark testified that ShamarionÓs claim for past

medical expenses related to his injury was $202,835.50, which

consisted of $74,061.27 in Medicaid benefits paid by AHCA,

$106,656.23 in benefits paid by Sunshine State Health , and

$22,118 in unpaid medical bills.

2 2 . Mr. Newmark testified that Shamarion , or others on his

behalf , did not make payments in the past or in advance for

future medical care , and no claim was brought to recover

reimbursement for past payments for future medical care.

23 . Mr. Newmark testif ied that through his representation

of Shamarion, review of ShamarionÓ s file, and based on his

training and experience , he had developed the opinion that the

value of ShamarionÓs damages Ðwould be in excess of $2,250,000.Ñ

He explained that he had discuss ed ShamarionÓs case with other

experienced attorneys and they concurred in this damage

valuation. Further, to supplement his opinion concerning the

value of ShamarionÓs damages, Mr. Newmark outlined that the jury

verdicts in PetitionerÓs Exhibit 12 were c omparable to

ShamarionÓs case. He outlined that the Cherenfant v. Lewis 2016

Broward County $4,821,000 ve rdict was most supportive.

Mr. Newmark outlined that in Lewis , the same plaintiff and

defense experts were used as were used in ShamarionÓs case, and

the facts and injury in Lewis were nearly identical to the facts

and injury in ShamarionÓs case. Mr. Newmark outlined that in

Lewis , the jury awarded $3,000,000 in pain and suffering to the

child and this underscores that his valuation of all ShamarionÓs

damages at $2,250,000 is extremely conservative.

24 . Mr. Newmark explained that ShamarionÓs medical

malpractice lawsuit was brought against the obstetrician who

delivered Shamarion and the hospital where the birth took place.

He noted that there were man y considerations that led to

settlement, including most importantly that the primarily

responsible party, the obstetrician, was uninsured, and the

parents needed the certainty of a settlement over the risk of a

defense verdict or verdict that may or may no t be collectable.

Based on these considerations, the case settled for $410,000.

25 . Mr. Newmark testified that the settlement did not

fully compensate Shamarion for the full value of his damages.

He testified that based on the conservative valuation of all

ShamarionÓs damages of $2,250,000 , the settlement represented a

recovery of 18.2 percent of the value of ShamarionÓs damages.

Mr. Newmark testified that because Shamarion only recovered

18.2 percent of the value of his damages in the settlement, he

on ly recovered 18.2 percent of his $202,835.50 claim for past

medical expenses, or $36,916.06.

26 . Mr. Newmark testified that the settling parties agreed

in the Releases that ShamarionÓs damages had a value in excess

of $2,250,000 , as well as the allocation of $36,916.06 of the

settlement to past medical expenses. He further testified that

the allocation of $36,916.06 of the settlement to past medical

expenses was reasonable and rational, as well as Ðthe fair thing

to do.Ñ Mr. Newmark testified that the al location of $36,916.06

to past medical expense s was conservative because it was based

on a low - end valuation of ShamarionÓs damages of $2,250,000, and

if a higher valuation of the damages was used, the amount

allocated to past medical expenses would have b een much less.

27 . Mr. Newmark testified that because no claim was made

to recover reimbursement for past payments for future medical

care, no portion of the settlement represented reimbursement for

past payments for future medical care. Mr. Newmark test ified

that the parties agreed in the Release s that no claim was made

for reimbursement of past payments for future medical care, and

no portion of the settlement represented reimbursement for

future medical expenses.

28 . Mr. Newmark testified that becau se Shamarion was a

minor , court approval of the settlement w as required.

Mr. Newmark testified that the court reviewed the settlement and

entered an order approving it.

Testimony of R. Vinson Barrett

29 . Mr. Barrett has been a trial attorney since 1977 a nd

has dedicated his practice to handling plaintiff personal injury

cases, including medical malpractice, medical products

liability , and pharmaceutical products liability. He is the

senior partner with the Tallahassee law firm of Barrett, Fasig &

Brooks, which exclusively works in the area of plaintiffÓs

personal injury. Mr. Barre tt has handled many jury trials and

has handled many catastrophic injury cases , including medical

malpractice cases involving injury to children. Mr. Barrett

testified that he has handled a number of cases involving

brachial plexus birth injuries similar to ShamarionÓs injury.

Mr. Barrett testified that he stays abreast of jury verdicts and

he daily makes assessments concerning the value of damages

suffered by injured parties e xplaining his process for making

these determinations. He testified that he has been accepted as

an expert in the valuation of damages by DOAH in Medicaid lien

dispute proceedings in other cases. Mr. Barrett was accepted as

an expert in the valuation of damages suffered by injured

parties.

30 . Mr. Barrett testified that he was familiar with

ShamarionÓs injuries and had reviewed ShamarionÓs medical

records and the exhibits filed in this proceeding. He provided

a detailed explanation of ShamarionÓs brachi al plexus birth

injury noting that ÐheÓs probably never going to be able to have

anywhere near a normal childhood or work - hood because of the

limitations that he has from this injury.Ñ

31 . Mr. Barrett testified that based on his review of

ShamarionÓs cas e , and based on his professional experience and

training , ShamarionÓs damages had a value higher than the

$2,250,000 value used by the settling parties. Mr. Barrett

testified that ShamarionÓs damages have a value of $2,500,000.

He further testified that ShamarionÓs Ðloss of enjoyment of life

is going to be huge for him, remember, he is going to have birth

to death in actual pain and suffering . . . so with all that in

mind, you know, the opinion that I have $2,000,000 wouldnÓt

trouble me as a jury verdict for pain and suffering and loss of

enjoyment of lifeÑ alone. Mr. Barrett outlined that the jury

verdicts in PetitionerÓs Exhibit 12 were comparable with

ShamarionÓs case and supported his valuation of the damages.

Consistent with Mr. NewmarkÓs testimony , Mr. Barrett identified

the Lewis $4,821,000 verdict as most relevant and comparable to

ShamarionÓs case.

32 . Mr. Barrett testified that he was aware of the

settlement amount and he testified that the settlement did not

fully compensate Shamarion for th e full value of his damages.

He explained that he was aware that the parties had allocated

$36,916.06 to past medical expenses based on a valuation of all

damages of $2,250,000. Mr. Barrett testified that he believes

allocation of $36,916.06 to past medi cal expenses was

reasonable, rational , and conservative . ÐI think itÓs

conservative because itÓs based on a total damage number

($2,250,000) which I think is conservative.Ñ

33 . AHCA did not propose a differing valuation of

ShamarionÓs damages or contest the methodology used by the

parties to calculate the $36,916.06 allocation to past medical

expenses. Consequently, the testimony and evidence presented

concerning the value of PetitionerÓs damages and the allocation

to past medical expense was unrebutted .

34 . The Agency was not a party to settlements or written

settlement agreements, if any exist, separate and apart from the

Releases. Nor were the Defendants signatories to the settlement

agreement, apparently accepting the Releases signed by

Petitioners in exchange for the settlement payments.

35 . No value of Shamarion Ó s future medical expenses was

advanced by either party. As noted earlier, both Releases

contained the following provision:

Further, the parties acknowledge that

Shamarion Manley may need future medical

care related to his injuries, and some

portion of this settlement may represent

compensation for future medical expenses

Shamarion Manley will incur in the future.

36 . Given the nature and severity of ShamarionÓs injury,

it can reasonabl y be expected that Shamarion will incur future

medical expenses. Notably, Mr. Newmark testified that Shamarion

has suffered a permanent neurological impairment, and has

Ðalready had five surgeries do wn at Miami ChildrenÓs with

Dr. Grossman and Dr. Price.Ñ Moreover, the Life Care Plan

prepared for Shamarion reflects regular pediatric orthopedist

and psychiatric evaluations and treatments to age 18.

37 . Mr. Newmark further testified that ShamarionÓs total

damages would be in excess of $2,250,000, which Ðwo uld take into

account his future life care needs, his past medicals, his

future earning and earning capacity, benefits, losses.Ñ

38 . Petitioner offered in evidence a Preliminary Economic

Damages Analysis, which presented life care cost computations

and ea rnings capacity losses. A summary of those computations

is presented below:

BASIC INFORMATION

Shamarion Manley

All Figures are in Present Value

LOW AVERAGE HIGH

LIFE CARE PLAN: $556,109.16 $858,606.03 $1,161,102 .90

EARNINGS LOSSES: $262,214.24 $262,214.24 $262,214.24

BENEFIT LOSSES: $52,442.85 $52,442.85 $52,442.85

Overall Range

LOW AVERAGE HIGH

$870,766.24 $1,173,263.11 $1,475,759.99

39 . Mr. Newmark also noted that some portion of the

$2,250,000 valuation would be for n on - economic (pain and

suffering) damages. Mr. Newmark testified that ShamarionÓs non -

economic damages would be factored in Ðat over a million

dollars.Ñ

40 . Other than the Life Care Plan and Preliminary Economic

Damages Analysis, at hearing , Petitioner di d not advance a

valuation for future medical expenses. However, given the

figures contained in the economic damages analysis , it is clear

that t he vast majority of future economic damages will relate to

the costs associated with the life care plan, includ ing future

medical expenses.

41 . Petitioner has not proven by clear and convincing

evidence that $36,916.06 of the settlement represents

reimbursement for past medical expenses and payment for future

medical expenses.

42 . Petitioner has not proven by cl ear and convincing

evidence that a lesser portion of the total recovery should be

allocated as reimbursement for past medical expenses than the

$74 ,061.27 amount calculated by Respondent pursuant to the

formula set forth in section 409.910(11)(f).

CONCLUSI ONS OF LAW

43 . The Division of Administrative Hearings has

jurisdiction over the subject matter and the parties in this

case pursuant to sections 120.569, 120.57(1), and 409.910(17),

Florida Statutes.

44 . Respondent is the agency authorized to administe r

FloridaÓs Medicaid program. See § 409.902, Fla. Stat.

45 . The Medicaid program Ðprovide[s] federal financial

assistance to States that choose to reimburse certain costs of

medical treatment for needy persons.Ñ Harris v. McRae , 448 U.S.

297, 301 (1980) . Though participation is optional, once a state

elects to participate in the Medicaid program, it must comply

with federal requirements governing the same. Id.

46 . As a condition for receipt of federal Medicaid funds,

states are required to seek r eimbursement for medical expenses

incurred on behalf of Medicaid recipients who later recover from

legally - liable third parties. See Ark. Dep't of Health & Human

Servs. v. Ahlborn , 547 U.S. 268, 276 (2006).

47 . Consistent with this federal requirement , the Florida

Legislature has enacted section 409.910, which authorizes and

requires the State to be reimbursed for Medicaid funds paid for

a recipient's medical care when that recipient later receives a

personal injury judgment or settlement from a third party.

Smith v. Ag. for Health Care Admin . , 24 So. 3d 590 (Fla. 5th DCA

2009). The statute creates a n automatic lien on any such

judgment or settlement for the medical assistance provided by

Medicaid. See § 409.910(6)(c), Fla. Stat.

48 . The amount to be recovered for Medicaid medical

expenses from a judgment, award, or settlement from a third

party is determined by the formula in section 409.910(11)(f),

which sets that amount at one - half of the total recovery, after

deducting attorneyÓs fees of 25 perc ent of the recovery and all

taxable costs, up to, but not to exceed, the total amount

actually paid by Medicaid on the recipientÓs behalf. Ag. for

Health Care Admin. v. Riley , 119 So. 3d 514, 515 n.3 (Fla. 2d

DCA 2013).

49 . Respondent correctly assert s that it is not

automatically bound by any allocation of damages set forth in a

settlement between a Medicaid recipient and a third party that

may be contrary to the formulaic amount, citing section

409.910(13). See also £ 409.910(6)(c)7., Fla. Stat. (ÐN o

release or satisfaction of any . . . settlement agreement shall

be valid or effectual as against a lien created under this

paragraph, unless the agency joins in the release or

satisfaction or executes a release of the lien.Ñ). Rather, in

cases such as t his, where Respondent has not participated in or

approved the settlement, the administrative procedure created by

section 409.910(17)(b) is the means for determining whether a

lesser portion of a total recovery should be allocated as

reimbursement for medi cal expenses in lieu of the amount

calculated by application of the formula in section

409.910(11)(f).

50 . Section 409.910(17)(b) provides that:

A recipient may contest the amount

designated as recovered medical expense

damages payable to the agency purs uant to

the formula specified in paragraph (11)(f)

by filing a petition under chapter 120

within 21 days after the date of payment of

funds to the agency or after the date of

placing the full amount of the third - party

benefits in the trust account for the

benefit of the agency pursuant to

paragraph (a). The petition shall be filed

with the Division of Administrative

Hearings. For purposes of chapter 120, the

payment of funds to the agency or the

placement of the full amount of the third -

party benefits in the trust account for the

benefit of the agency constitutes final

agency action and notice thereof. Final

order authority for the proceedings

specified in this subsection rests with the

Division of Administrative Hearings. This

procedure is the exclusive method for

challenging the amount of third - party

benefits payable to the agency. In order to

successfully challenge the amount payable to

the agency, the recipient must prove, by

clear and convincing evidence, that a lesser

portion of the total recovery should be

allocated as reimbursement for past and

future medical expenses than the amount

calculated by the agency pursuant to the

formula set forth in paragraph (11)(f) or

that Medicaid provided a lesser amount of

medical assistance than that asserted by the

agency .

51 . Section 409.910(17)(b) thus makes clear that the

formula set forth in subsection (11) constitutes a default

allocation of the amount of a settlement that is attributable to

medical costs, and sets forth an administrative procedure for

ad versarial testing of that allocation. See Harrell v. State ,

143 So. 3d 478, 480 (Fla. 1st DCA 2014)(adopting the holding in

Riley that petitioner Ðshould be afforded an opportunity to seek

the reduction of a Medicaid lien amount established by the

statuto ry default allocation by demonstrating, with evidence,

that the lien amount exceeds the amount recovered for medical

expenses,Ñ and quoting Roberts v. AlbertsonÓs, Inc. , 119 So. 3d

457, 465 - 466 (Fla. 4th DCA 2012)).

52 . Clear and convincing evidence Ðreq uires more proof

than a Òpreponderance of the evidenceÓ but less than Òbeyond and

to the exclusion of a reasonable doubt.ÓÑ In re Graziano ,

696 So. 2d 744, 753 (Fla. 1997). The clear and convincing

evidence level of proof:

[E] ntails both a qualitative a nd

quantitative standard. The evidence must be

credible; the memories of the witnesses must

be clear and without confusion; and the sum

total of the evidence must be of sufficient

weight to convince the trier of fact without

hesitancy.

Clear and convinci ng evidence

requires that the evidence must be

found to be credible; the facts to

which the witnesses testify must

be distinctly remembered; the

testimony must be precise and

explicit and the witnesses must be

lacking in confusion as to the

facts in issue. The evidence must

be of such weight that it produces

in the mind of the trier of fact a

firm belief or conviction, without

hesitancy, as to the truth of the

allegations sought to be

established.

In re Davey , 645 So. 2d 398, 404 (Fla. 1994)(quoting, wit h

approval, Slomowitz v. Walker , 429 So. 2d 797, 800 (Fla. 4th DCA

1983)); see also In re Henson , 913 So. 2d 579, 590 (Fla. 2005).

ÐAlthough [the clear and convincing] standard of proof may be

met where the evidence is in conflict, it seems to preclude

ev idence that is ambiguous.Ñ Westinghouse Elec tric Corp. v.

Shuler Bros. , 590 So. 2d 986, 989 (Fla. 1st DCA 1991).

53 . As an alternative to the formula set forth in section

409.910(11)(f), Petitioner urges the application of a formula

which compares the a mount of past medical expenses (here, the

amount of Medicaid's lien) to the total damages, and then an

application of that same proportion to the settlement amount, to

determine the amount to be reimbursed to the Agency.

54 . The fatal shortcoming in Peti tionerÓs case was the

failure to include both past and future medical expenses in the

application of its alternative formula. As is evident by the

life care plan cost computations, in a case where the injuries

are catastrophic, and are suffered by a young person, future

medical expenses will be significant and will radically alter

the product of PetitionerÓs formula.

55 . PetitionerÓs position is that it has met its burden of

proof by virtue of the settlement agreement provision agreeing

that PetitionerÓs alleged damages are $2,250,000, and that the

amount allocated to past medical expenses is $36,916.06.

Petitioner contends that it need not prove the amount allocated

to future medical expenses.

56 . The interpretation of the following emphasized

languag e in section 409.910(17)(b) has been examined in several

DOAH Final Orders:

In order to successfully challenge the

amount payable to the agency, the recipient

must prove, by clear and convincing

evidence, that a lesser portion of the total

recovery should be allocated as

reimbursement for past and future medical

expenses than the amount calculated by the

agency pursuant to the formula set forth in

paragraph (11)(f) or that Medicaid provided

a lesser amount of medical assistance than

that asserted by the ag ency. (emphasis

added).

5 7 . The undersigned is in agreement with Administrative

Law Judge Elizabeth W. McArthur, who concluded in Villa v.

Agency for Health Care Admin istration , Case No. 15 - 4423MTR (Fla.

DOAH Dec. 30, 2015) , the following:

73. The und ersigned is persuaded by the

logic of those DOAH Final Orders that have

interpreted section 409.910(17)(b) to

require proof of the amount of the third -

party recovery that should be allocated to

medical damages (past and future), from

which AHCA may satisfy its Medicaid lien

consistent with Florida law, Ahlborn , and

Wos . See, e.g. , Savasuk v. Ag. for Health

Care Admin. , Case No. 13 - 4130MTR (Fla. DOAH

Jan. 29, 2014); Holland v. Ag. for Health

Care Admin. , 13 - 4951MTR (Fla. DOAH May 2,

2014); Silnicki v. Ag. f or Health Care

Admin. , Case No. 13 - 3852MTR (Fla. DOAH

July 15, 2014); Goddard v. Ag. for Health

Care Admin. , Case No. 14 - 4140MTR (Fla. DOAH

March 23, 2015).

(Final Order, p. 36)

58 . While there have been other DOAH Final Orders reaching

a different conc lusion regarding the interpretation of section

409.910(17)(b), a recent decision of FloridaÓs First District

Court of Appeal lays the matter to rest. In Giraldo v. Agency

for Health Care Admin istration , 2016 Fla. App. LEXIS 18299 (Fla.

1 st DCA 2016), 2/ th e court affirmed Judge McArthurÓs decision,

stating:

Second, we find no error in the ALJÓs legal

determination relating to AHCAÓs right to

secure reimbursement for payments already

made for medical costs from not only that

portion of the settlement allocat ed for past

medical expenses but also from that portion

of the settlement intended as compensation

for future medical expenses. We do so

initially because that is precisely what

Florida law required the ALJ to do. Section

409.910(11)(f) sets forth the fo rmula for

determining that portion of a Medicaid

recipientÓs ÐrecoveryÑ pursuant to a

settlement with a third party that must be

allocated to satisfy Ðthe total amountÑ of

medical costs Medicaid has provided.

§ 409.910(11)(f), Fla. Stat. (2014).

Specific ally, the formula allocates one half

of the gross (or entire settlement) recovered

(which would include the recipientÓs recovery

for past and future medical costs) less only

attorneyÓs fees and costs as designated to

repay the stateÓs Medicaid agency for t he

medical expenses that it has paid.

Likewise, section 409.910(17)(b), which

authorizes a Medicaid recipient to challenge

the amount allocated under section

409.910(11)(f), expressly requires

consideration of the amounts the Medicaid

recipient has Ðreco veredÑ to reimburse him

or her Ðfor past and future medical

expenses.Ñ § 409.910(17)(b), Fla. Stat.

(2014). Section 409.910(17)(b) then

requires the Medicaid recipient to prove by

clear and convincing evidence that a smaller

portion of this recovery shou ld be made

available for payment to AHCA than the

amount es tablished under section

409.910 (11)(f):

(17)(b) A [Medicaid] recipient

may contest the amount designated

as recovered medical expense

damages payable to the agency

pursuant to the formula in

pa ragraph (11)(f) by filing a

petition under chapter 120 . . . .

In order to successfully challenge

the amount payable to the agency,

the [Medicaid] recipient must

prove, by clear and convincing

evidence, that a lesser portion of

the total [settlement] reco very

should be allocated as

reimbursement for past and future

medical expenses than the amount

calculated by the agency pursuant

to the formula set forth in

paragraph (11)(f). . . .

Id.

Pursuant to prevailing law, Villa was

obligated to establish as pa rt of his

challenge that portion of his recovery that

he claimed was attributable to reimbursement

by the third - party tortfeasor for both his

past and his future medical expenses . Since

Villa intentionally introduced no evidence

as to the amount recovered for future

medical expenses, the ALJ was correct in

determining that he failed to satisfy his

burden under section 409.910(17)(b) to avoid

application of the statutory formula

contained in section 409.910(11)(f).

(e mphasis a dded ).

59 . Given the unequi vocal pronouncement in Giraldo quoted

above, PetitionerÓs choice not to prove the amount of

PetitionerÓs future medical expense damages (and to include

those future expenses in its alternative formula calculation)

compels the conclusion that Petitioner fai led to meet its burden

to rebut the statutory formulaÓs amount designated as recovered

medical expense damages.

ORDER

Upon consideration of the above Findings of Fact and

Conclusions of Law, it is hereby ORDERED that:

The Agency for Health Care Administra tion is entitled to

$74,061.27 in satisfaction of its Medicaid lien.

DONE AND ORDERED this 28th day of December , 2016 , in

Tallahassee, Leon County, Florida.

S

W. DAVID WATKINS

Administrative Law Judge

Division o f Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 28th day of December , 2016 .

ENDNOTE S

1/ There were two (2) Releases because there were two separate

settlements totaling $410,000. Each Release contained the same

language relative to the allocation to past medical expenses.

One Release allocated $32,453.68 of the settlem ent to past

medical expenses, and the other Release allocated $4,462.38 of

the settlement to past medical expenses. The combined total

amount of the $410,000 in settlement allocated to past medical

expenses in the two Releases was $36,916.06.

2/ The Fir st District Court of Appeal Case Docket reflects that

the Court has granted AppellantÓs Motion for Extension of Time

to File a Motion for Rehearing En Banc and Request for

Certification. The Court has extended the time for Appellant to

file those motions to January 4, 2017.

COPIES FURNISHED:

Alexander R. Boler, Esquire

Xerox Recovery Services

Suite 300

2073 Summit Lake Drive

Tallahassee, Florida 32317

(eServed)

Floyd B. Faglie, Esquire

Staunton and Faglie, P.L.

189 East Walnut Street

Monticello , Florida 32344

(eServed)

Justin Senior, Interim Secretary

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 1

Tallahassee, Florida 32308

(eServed)

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Stuart William s , General Counsel

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Shena L. Grantham, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Thomas M. Hoeler, Esquire

Agency for Health Care Administration

2727 Mahan Drive, Mail Stop 3

Tallahassee, Florida 32308

(eServed)

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is a dversely affected by this Final Order is

entitled to judicial review pursuant to section 120.68, Florida

Statutes. Review proceedings are governed by the Florida Rules

of Appellate Procedure. Such proceedings are commenced by

filing the original notice o f administrative appeal with the

agency clerk of the Division of Administrative Hearings within

30 days of rendition of the order to be reviewed, and a copy of

the notice, accompanied by any filing fees prescribed by law,

with the clerk of the District Cou rt of Appeal in the appellate

district where the agency maintains its headquarters or where a

party resides or as otherwise provided by law.